LBS Blockchain Delegate Communication Thread

Governance Delegate Statements
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Key Info

Introduction

LBS Blockchain is a student and professional society at the London Business School (LBS) set up in 2021 to empower the next generation of LBS business leaders to pursue the fast-growing opportunities in web3. We focus on:

  • Education: Educating our peers on blockchain technology and new protocols in development in the ecosystem
  • Career Opportunities: Helping students place into roles in web3 and network within the wider web3 community
  • Entrepreneurship: Leveraging the entrepreneurial talent at LBS to originate capital and bring ventures to market
  • Governance: Participating as delegates in leading DAOs and incubating our own experiments in on-chain governance

The LBS Blockchain Society is currently the fastest growing and most active society at LBS, having gained over 700+ Telegram members and organising numerous events for our internal and wider London community. This includes hosting our flagship Blockchain Conference, where we invite 250+ students, alumni and industry leaders to participate in 3 days of panel sessions, workshops, hackathon events and more.

Delegate Statement (why you should delegate to us)

LBS is a globally top-ranked business school and hosts one of the most internationally diverse student bodies. Strategically located in London, LBS students are experts in wide ranging subject matters, from financial markets, to organisational theory, to data science and more. Given the diversity of cultural and professional backgrounds amongst the student cohort, LBS students are highly entrepreneurial by nature. In 2021, London Business School entrepreneurs raised a cumulative $4B of funding in 2021, while our alumni have founded over 560 companies so far, including unicorns such as HelloFresh, Feedzai, Wayflyer, Livspace, and many more.

Despite our short history, we have been delegates to MakerDAO from May 2022 to April 2023 (through the a16z Token Delegate Programme) and Aave since October 2022. As such, we have acquired governance expertise that we believe will assist with our decision-making on Arbitrum. We always commit to voting independently and impartially, and to open source our rationale through frequent updates to this thread. We intend for such transparency to help anchor our thinking and hold ourselves accountable to the Arbitrum community.

Given our presence in Europe and the potential for partnerships beyond the governance programme, we see a natural synergy here for the society to be further involved with the activities of the network. As stated above, one of our objectives is to act as a facilitator in connecting the talent in our community to industry. We do so by organising large-scale events, workshops, networking sessions and more, as well as by directly helping to place students into roles in industry. Given the need for talent in a growing ecosystem like Arbitrum’s, we see significant scope for synergies both in and beyond our role as delegates.

We commit to dedicate our time and resources to help accelerate Arbitrum’s development and growth. We commit also to leverage our global network, business knowledge, and entrepreneurial mindset, to drive value for Arbitrum token holders.

Conflicts of Interest

Members of our team are founders of projects with a presence in other Layer 1 and Layer 2 ecosystems. We also hold personal portfolios of network tokens that give us financial exposure to the growth of these ecosystems.

That said, LBS Blockchain currently does not currently have any material conflicts of interest regarding Arbitrum. In particular, as a society, we do not hold any cryptocurrencies besides a minor stake in Ethereum for voting gas purposes, nor do we currently accept membership fees. We agree to keep the Arbitrum community updated should any future conflicts of interest arise.

Waiver of Liability

By delegating to LBS Blockchain, you acknowledge and agree that LBS Blockchain will participate on a best-efforts basis and will not be liable for any form of damages related to participation in the Arbitrum Protocol or this DAO.

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Proposal: The Arbitrum Coalition

Vote: Against

Rationale: We support the initiative to professionalise DAO operations by involving professional contributors like BWR, Gauntlet and TOB. However, the proposed budget is overly expensive for the intended scope, and lacks sufficient cost breakdowns and measurable KPIs to justify its passage. Moreover, there is a potential hazard of centralisation in voting power as the Coalition would have 25% influence over the Security Council.

While we agree with the underlying goal of augmenting governance effectiveness, our support for establishing such a council hinges on a thorough budget reassessment, alongside a provision of more detailed financial breakdowns and specific KPIs. If this vote passes, we would like to see a revised proposal enumerating the reasoning behind these points. If it does not pass, we are keen to support it once revised.

Consolidate Security Proposals into a RFP Process

Vote: For

Rationale: The RFP process to onboard qualified security service providers ensures no single auditor can dominate the space. This preserves the decentralized ethos of the DAO and fosters a competitive yet collaborative environment where the security services are of better cost-effectiveness, higher quality, and more flexibility in response to the needs of the ecosystem.

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Proposal to Backfund Successful STIP Proposals

Vote: For

Rationale: We support this proposal to backfund projects from Round 1 of the STIP and ensure broad-based support for this cohort. We understand that the est. 21M cost for 26 approved projects constitutes c. 10% of budgeted spend for Q4 2023, and we see this as a good use of funds in terms of investing in growth, building out the ecosystem, and supporting smaller and more innovative projects to improve the diversity and resiliency of the ecosystem. That said, we would caution against future repeated use of backfunding as it may set the wrong precedent for overruling due process (incl. funding prospects for STIP Round 2).

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Proposal to Funding Gas Rebate and Trading Competition Program to Amplify Arbitrum’s Ecosystem Growth

Vote: Against

Rationale: We consider the funding request of 1.5M ARB is disproportionate in light of the current status and maturity of Rage Trade, particularly with V2 still being in beta. Moreover, incentivising trading on a single platform runs the risk of picking winners, which we see as bad DAO governance. We share other community member’s concerns regarding the long-term impact and sustainability of these types of initiatives. Given these factors, we recommend against funding this proposal.

If Arbitrum DAO were to consider a similar proposal in the future, we would recommend tendering proposals from a broad selection of DEX protocols (i.e., not just Rage Trade) to ensure incentives are distributed broadly and fairly.

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Funding Gas Rebate and Trading Competition Program to Amplify Arbitrum’s Ecosystem Growth

Vote: No

Rationale:
We consider the funding request of 1.5M ARB is disproportionate in light of the current status and maturity of Rage Trade, particularly with V2 still being in beta. Moreover, incentivising trading on a single platform runs the risk of picking winners, which we see as bad DAO governance. We share other community member’s concerns regarding the long-term impact and sustainability of these types of initiatives. Given these factors, we recommend against funding this proposal.

If Arbitrum DAO were to consider a similar proposal in the future, we would recommend tendering proposals from a broad selection of DEX protocols (i.e., not just Rage Trade) to ensure incentives are distributed broadly and fairly.

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Procurement Framework | Security : Non-Constitutional Proposal

Vote: For

Rationale:
We support this procurement framework to onboard security-based providers. It strives to ensure that the security services provided are of high quality and are selected in a transparent and fair way. Compared to the previous RFP proposal, this finalized version adds more details on execution workflow and is more ready as a guideline.

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AIP: ArbOS Version 11

Vote: For

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Establish the ‘Arbitrum Research & Development Collective

Vote: No

Rationale:
While the ARDC proposal is in strategic alignment with ArbitrumDAO’s goals and promises to pool expertise for enhanced governance, security, and risk management, there are significant concerns that lead to the recommendation against funding. The six-month duration outlined for the organisation’s first mandate may be too short to observe significant changes or improvements within the Arbitrum ecosystem. This limited timeframe restricts the potential impact and measurable outcomes that the ARDC could achieve, thereby making the investment challenging to justify. Additionally, the proposal’s approach of electing a single DAO Advocate contradicts the decentralised ethos inherent to DAOs, potentially undermining the collective decision-making process. Moreover, the structure of predetermined costs for each role in the proposal raises issues regarding efficiency and cost-effectiveness. A competitive tender process, allowing applicants to specify service costs and scope of work, would ensure transparency, accountability, and that compensation aligns with the level of contribution and productivity. These factors lead to the conclusion that the proposal, as it stands, should not be funded.

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Timeline Extension for STIP and Backfund Grantees

Vote: YES

Rationale:
The proposal aligns with the principles of flexibility, fairness, and operational accommodation, ultimately contributing to the robustness and success of the Arbitrum ecosystem.
Not adjusting hedgy streams is not ideal, as it prevents stopping streams in the event of a protocol not using ARB as intended. However, it is compromised from the fact that after January 26th, protocols will only have 1/7 of their streams left to distribute, will have already been following the rules for several weeks at that point, and it is expected that they won’t want to ruin their reputations by breaking the rules.

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Experimental Incentive System for Active ArbitrumDAO Delegates

Vote: YES, option 2

Rationale:
The proper incentive is crucial for motivating delegates to participate continuously in DAO governance. Although designing a perfect reward mechanism is nearly impossible, the current framework attempts to capture the nuances of evaluation. We believe it is worth trialing for six months. Furthermore, the automation provided by Karma enhances administrative efficiency, eases the burden on delegates to report their work monthly, and improves data transparency

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[Non-Constitutional]: Establish the ArbitrumDAO Procurement Committee

Vote: YES

Rationale:
The ADPC is set to introduce a structured, transparent procurement process, crucial for the ecosystem’s sustainable development. Attracting individuals with domain-specific expertise will elevate the quality of service procurement, ensuring high standards within the ecosystem.
We recognize the community’s concerns about potential centralization and the right economic value of the compensation. These were adequately addressed in the discussion, and if necessary, appropriate adjustments can be expected.

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Long-Term Incentives Pilot Program

Vote: YES, Fund Program with 45,815,000

Rationale:
We believe that a long term incentive program is essential to support builders contributing to the Arbitrum ecosystem. This pilot program, upgraded upon feedback from previous STIP, suggests a DAO-elected councils framework to screen out the proposal which we see as reasonable and feasible.

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Constitutional AIP - Security Council Improvement Proposal

Vote: Yes, Increase the threshold to 9/12
Rationale:
An increase in the threshold to 9/12 is the easiest way, and it can retain the flexibility of having a different threshold in the future. For the user protection, extending the exit period would be good but it is not necessary when the increase in the threshold is made, and it may cause the delay of finalization of proposals. Thus, we would like to vote for the option 1.

Changes to the Constitution and the Security Council Election Process

Vote: Yes
Rationale
The proposed changes, obviously, will improve the fairness of the application process in that applicants have adequate time to apply for the Security Council and avoid the unfair advantage to the nominees who are selected earlier. Also, ensuring that the candidates have the ability to produce necessary signed messages across various chains should be necessary.

For the issue of whether the shielded voting system should be introduced, the system would be good to get rid of an influence coming from earlier voters who have a large amount of voting power, but careful consideration is needed in terms of technological feasibility.

Empowering Early Contributors: The community Arbiter Proposal 2.0

Vote: Yes
Rationale
We voted yes for the Arboter proposal 1.0. The reasons of the decision was: the allocation of 500,000 $ARB tokens to “Arbiters” in order to acknowledge and reward their contributions made during 2021-2023 is mutually beneficial to both contributors and Arbitrum ecosystem. We consider that recognising past contributions sends a positive signal for ecosystem contributors and encourages future continued growth of the Arbitrum community.

From the community discussion, we noted that Arbiters received 6500-7000 USDC as a compensation for the work on Discord and no clear record is preserved to prove that who made what contribution. In addition, it is also noted that there is a potential risk that the society cannot compensate to people outside Arbiters who made contributions at that time. But, from the fact that Arbiters worked much outside Discord, that the proposal plan to distribute $ARB equally with a reasonable amount, and that without the reward the team obviously contributed to Arbitrum cannot be appropriately rewarded, we should vote Yes for the proposal.

Funding for Into the Dungeons: Machinata - a PvP Digital Miniature Game V2

Vote: Against
Rationale
Funding an individual project without a general scheme should be avoided because we should not evaluate it individually but a series of actions to improve the Arbitrum community. In the proposal, we cannot see, by implementing the game, a quantitative target and justification that we can think the target can be achieved.

We acknowledged that such games would help Arbitrum community attract/engage new users, so expect a proposal of establishing a general framework of funding.

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Catalyze Arbitrum Gaming: HADOUKEN!

Vote: Against

Rationale

1. Lack of Incentive Alignment Mechanisms

The proposal does not adequately ensure that incentives are aligned across developers, players, and the Arbitrum ecosystem, leading to a potential risk of low-quality games that prioritize short-term liquidity over long-term value and engagement.

2. Insufficient Legal Framework for Investments

The proposal fails to outline how the equity or interest in the projects funded through this initiative will be managed. This omission raises concerns about the protection of investments and the legal rights of the Arbitrum DAO in the funded projects.

3. Absence of a Comprehensive Assessment Framework

While the creation of the GCP + Catalyst Team is a step in the right direction, the proposal lacks a comprehensive framework for assessing gaming projects. There is no clear methodology outlined for evaluating the potential of projects to align with the long-term objectives of the Arbitrum ecosystem, ensure community engagement, and avoid incentivizing short-term financial exploitation.

4. No Detailed Timeline or Strategy for Impactful Game Development

The proposal does not provide a convincing strategy or timeline for developing games that can have a lasting impact on the Arbitrum ecosystem. Given that Arbitrum is already navigating a competitive landscape, the focus should be on funding games that are inherently fun to play and can attract and retain a loyal player base over time.

5. Lack of Cost/Benefit Analysis

There is no cost/benefit analysis provided to justify the substantial financial outlay proposed. A detailed financial analysis is essential to assess the viability and economic impact of the proposed investment, ensuring that it aligns with the DAO’s financial health and strategic objectives.

While we recognize the strategic importance of investing in the gaming ecosystem to enhance Arbitrum’s position in the blockchain space, the current proposal does not meet the necessary criteria for a responsible and strategic investment. Our decision to vote against the proposal reflects our commitment to ensuring that any investment made by the DAO is conducted with a clear strategy, legal protection, and a focus on long-term value creation for the Arbitrum ecosystem. We encourage the proposal’s authors to address these concerns and look forward to revisiting an improved version that aligns with our shared goals for the future of Arbitrum.

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